The minutes from the latest European Central Bank meeting on interest rates—at which rates were cut by 25 basis points to 2.15% — have just been published. Below are the key points from the document:
- Energy prices and a strong euro have been the main drivers of the recent rise in overall price levels across the euro area.
- Markets have swung wildly this year, but euro-area assets now outperform U.S. assets and the euro is acting as a safe haven.
- Headline inflation fell to 1.9 % in May and most underlying gauges point to a durable return to the 2 % target as wage growth cools.
- Members now see GDP growing 0.9 % in 2025, 1.1 % in 2026 and 1.3 % in 2027, little changed overall but with higher uncertainty from trade tensions.
- The Governing Council cut its three key rates by 25 bp (deposit rate to 2.0 %) and still anticipates one more reduction by year-end.
- Escalating tariffs would lower both growth and inflation, but supply-chain shocks could push prices up, so the outlook remains finely balanced.
There have been no significant moves in the EURUSD currency pair following the release of the ECB minutes. Investors are clearly waiting for the NFP jobs report, which is due in less than an hour
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